Iranian President Visits Turkey First Time in 18 Years

Iran and Turkey moved to strengthen business ties as Hassan Rouhani, the first Iranian president to visit Turkey in 18 years, seeks to re-engage his country in the world economy as sanctions ease.

The two governments reached agreement to link the railway network between the neighbors and improve cooperation in banking, Rouhani told a news conference with Turkish President Abdullah Gul. Rouhani is accompanied on the trip by more than 100 businessmen, seven ministers and central bank Governor Valiollah Seif, according to his Twitter account.

While Iran and Turkey support opposing sides in Syria’s war, Gul hailed Rouhani’s visit “as a turning point in economic relations.” The two countries seek to double annual trade to $30 billion by 2015 in the event of “unfair” sanctions against Iran being lifted, Turkey’s Development Minister Cevdet Yilmaz said June 3.

The prospect of a final nuclear accord between Iran and world powers is encouraging more governments and companies to prepare for a possible lifting of sanctions, which would unlock trade with the Persian Gulf’s most populous country.

‘Potential Partner’

“The economic sanctions due to its nuclear program are bleeding the Iranian economy and increasing discontent among ordinary Iranians,” said Ozgur Unluhisarcikli, director of the German Marshall Fund of the United States in Ankara by e-mail on June 6. “Turkey, which appears to be a regional rival, is ironically also a very important potential partner that could help Rouhani,” in breaking Iran’s diplomatic isolation and easing economic sanctions, he said.

Turkey’s trade with Iran climbed to $22 billion in 2012, propelled by purchases of Iranian natural gas with gold, before tumbling to $14.6 billion last year, Yilmaz said. The gold trade with Iran largely ended after the U.S. Senate voted to approve new sanctions against Iran, closing gaps from previous measures, including trade in precious metals.

World powers, led by the U.S., agreed in November to ease some sanctions on Iran in return for curbs on the country’s nuclear program. In May, Rouhani said talks were showing a “positive trend” ahead of a July deadline to reach a comprehensive accord.

Rouhani won Iran’s presidential election in a year ago on pledges to ease sanctions and end the nation’s isolation in the world.

Syria War

The Shiite-ruled Islamic republic supports Syrian President Bashar al-Assad in his war against mainly Sunni rebels. Turkish Prime Minister Recep Tayyip Erdogan, once a personal friend of Assad, is helping the rebels in their bid.

“There may be tension over the civil war in Syria. But there appears to be far more drawing these two neighbors together than driving them apart,” Jonathan Schanzer, vice president of research at the Foundation for Defense of Democracies in Washington, said today in an e-mail. “This, of course, raises questions about Turkey’s reliability as a U.S. ally and as a NATO ally.”

Rouhani also held talks with Erdogan today and the two are scheduled to hold a joint news conference.

Turkey’s dialogue with Iran won’t raise objections in the U.S. or the Europan Union, provided Turkey doesn’t break ranks in commercial dealings with the Islamic republic, said Unluhisarcikli of theGerman Marshall Fund.

“So long as it plays along these lines, Turkey’s dialog with Rouhani will be more than welcome,” he said.